Intex Technologies (India) Ltd was founded in 1996. The company’s flagship brand INTEX covers 4 business segments: mobile handsets, consumer durables, IT accessories and retail. A pioneer in technology, Intex has PAN-India presence through its wide network comprising 29 stock and sales offices and over 800 service touch-points. The company is known for its consistent policy of transparent, fair and ethical trade practices.
Intex is one of the most successful Indian brands. Intex, which has been manufacturing their products In China, now started their own factory in India to manufacture feature phones and smartphones. In an interaction with Mobility magazine, Sanjay Kalirona, General Manager, Intex Technologies, shares mission, vision, plans and goals of Intex in India.
Sanjay says, “Intex was founded in 1996 with the vision of providing products that will make the life of people easy and productive. Initially we started with one product, Ethernet card. Now we have more than 100 products. In the beginning years, Intex started providing IT accessories suc as keyboard, mouse, speaker, headphone, cabinet, etc. Today, we are No. 1 in speaker segment, selling the highest number of speakers. In mobile segment, we started in 2007 initially with mobile feature phones. At that time, most brands in India were MNC brands. First differentiation we made was we started with dual SIM, whereas most other brands were with single SIM. In 2008, we came up with phones with long battery life as a differentiating point. With regular differentiations, we started grabbing the market share and attention of the customer. In 2012, we started providing smartphones of 3.2-inch display at Rs 4000. Later we added several models and today we have 18 models in our basket. Our smartphones are now available from Rs 2000 to Rs 12,000 at 5 to 6 price ranges, like Rs 2000-4000, 4000-6000, and so on.”
Providing products with differentiated and unique features keeps Intex ahead of its rivals
With decades of experience in innovation, supported by an invaluable asset of more than 2000 employee-force, Intex Technologies has established itself as a trusted brand in the industry today. The brand exhibits an exhaustive portfolio of more than 15 product categories ranging from mobile handsets, multimedia speakers, LED TVs and washing machines, to name a few. The company has state-of-the-art centers for R&D in India and China which are well-placed with modern equipment and are headed by highly qualified and experienced experts looking after product design & development. These facilities ensure that products are offered in line with the latest global standards. Intex’s manufacturing domain comprises factories in India and China manufacturing diverse products.
Sanjay asserts, “Our focus is always on how to offer value-for-money and the best benefits to the customer. For example, if someone purchases a phone for Rs 10,000, we examine and evaluate how we can give the best features, quality and service for that price. Basing on that, we identify the specifications and prepare the design. We have two R&D teams—one based in Delhi and the other in Shenzen, China. In China, we also have a separate design team in addition to R&D team. A total of 100 engineers and other experts work in our R&D and design teams. We have tied up with 3 OEMs to design hardware, software and components and to manufacture them. Design and specifications are provided by us and we have total control of production. In India, we recently started a factory in Baddi, Himachal Pradesh, where we are manufacturing feature phones with brand name Alfa. We have already started marketing these phones. At present, the production rate is only 20,000 per month. Our plan is to increase it to 100,000 in the coming months. Also we are planning to manufacture a basic model of smartphone, to start with. In India, we are among the top 10 brands taking into account all the brands, Indian and MNC; and taking only Indian brands into account, we are among the top 4. Currently we are selling 15 lac handsets a month, and among them 11 lac are features phones and 4 lac smartphones. People are fast shifting towards smartphones, but feature phone base is still there. Right now we sell nearly 70% feature phones and 30% smartphones. In a few months time this may become 50% and 50%.”
Market-specific strategy and region-specific promotion make Intex a winning brand
Intex is an ISO 9001:2008 certified company. The company’s operations are managed on a world-class collaborative business solution–SAP on a Virtual Private Network. Moving at a CAGR of 41.02 % over the last 3 financial years, the company has reached a turnover of more than Rs 20,000 million (Rs 2000 crore) in FY 2013-14. The company clocked a phenomenal growth of 100% in its overall turnover in FY 2013-14 over the previous year. Sales are routed through a distribution network comprising 1100+ distributors and 50,000+ dealers spread across the country. Products are also available at more than 250 dedicated counters of reputed chains of hyper-markets and specialty stores across India, on TV shopping channels and e-commerce sites. Intex has a global presence and Intex’s products are available in more than 70 countries worldwide. One important feature of Intex’s strategy is region-specific marketing and promotion.
Sanjay explains, “We are planning a new smartphone with Android 1. Smart watch is also one of the options we are examining. We are very quick in following the latest market trends and launching new innovations at the right times. We take quick decisions while selecting a new product and then designing, developing and launching that product. Being a North-Indian company, we have been strong in North-India and West-India, but our presence has been limited in South-India. We have strong competitors in the South, one based in Bangalore and the other based in Hyderabad. We tried everything to get a break in the South, but that did not work. Then we thought that we should try something different—let us try regional brand ambassadors and make them our face there and then proceed further. So we chose Sudeep, a Kannada actor, for Karnataka; and Anushka, an actress (who acts in Telugu, Tamil and Hindi films), for Andhra and Tamil Nadu as brand ambassadors. It worked amazingly well and we got the break in the South and now we are doing well there. East has not been a problem for us. We have strong presence in Jarkhand and other areas in the East. Northeast had been a challenge for us earlier, but later we started doing well there too.”
Lack of favorable conditions and government support discourages Indian manufacturers
Nowadays everything is manufactured in China and imported to India. This in fact adds up to transportation costs, import duties, and then, the worst thing, flight of money to China from India, which goes into manufacturing costs including salaries to the personnel. Despite all that providers prefer China as a manufacturing place. In spite of the fact India boasts of a large pool of English-speaking technocrats and low labor costs compared to China, we are unable to manufacture goods in India. The problem is lack of right facilities & infrastructure in India and lack of will on the government’s side where government policies are often discouraging to the domestic manufacturers.
With regard to manufacturing in India, Sanjay clarifies, “One major problem in India is non-availability of the components; whether it is PCB, chipset or battery; for everything we have to look towards China. What government should do is they should make components available in India by encouraging local manufacturing with favorable policies. Already three or four chipset manufacturing units have been approved by the authorities, but they have not yet started manufacturing. Once that starts, gradually other components also should be manufactured in India. Once we can get at least 30-40% of the components in India, we can provide India-made devices. At present, only India-made components that are available are batteries, chargers and earphones which constitute 15-20% of the needed components. We have to import rest of the key components from China and assemble them here. In China, government policies, working conditions, infrastructure setup and facilities are very favorable and encouraging. For example, when we started manufacturing speaker in India, we were into losses for 3 years. Then we increased volumes and slowly improved profits. We want to manufacture at least 50% our handsets in India in future. If we manufacture all the necessary components in India, we can have better control over quality and design. Even if something goes off track, we can get into line quickly and easily. The recent budget abolished tax on importing certain components which are not available in India. That is a good move. Though Indian brands could not manufacture successfully in India so far and are getting them manufactured in China, now Indian brands have stabilized and there is hardly any difference in quality and reliability between the Indian brands and MNC brands. Now Indian brands are able to control and monitor their R&D, design, manufacturing, etc as good as MNC brands, though all process takes place in China. Initially when we started manufacturing and assembling in India, we had many challenges, but over a period when things stabilized, we were able to control R&D, quality and manufacturing.”
Online retailing is a threat to some but an opportunity to those who know how to manage it sensibly
There is a general complaint from the traditional distributors and retailers that online retailers such as Flipkart, Snapdeal, eBay, etc are offering the same products at much cheaper prices, compared to the traditional channel, and are upsetting the MOP, posing a threat to the traditional sellers. Nowadays this price differences between e-commerce sites and traditional channels have become a big issue. In this regard, Sanjay opines, “Nowadays all Chinese brands are launching online at very competitive prices. 6 months back, online sales were only 3% now they have increased to 8-10% in general in India so we too want our nearly 10% sales should come from online sales. Recently we have launched some of our brands on Flipkart, eBay and Snapdeal. Initially we are launching only a few exclusive models via ecommerce sites so that we can have better control over them. Since we do not launch the same models online and on traditional channel, for us the price differential is not an issue and we control MOPs well. But in case we launch some model online and offline simultaneously, we will ensure that they will not breach the MOP of the traditional channel. Online is a great opportunity without any doubt. Next, online is an easy way to launch new products, whereas launching via traditional channel involves many complexities. Online sales will continue to grow in future. Right now online retailers are working with low taxes compared to traditional channel, but let us see what the government will do in the coming months. Yes, there has been panic among traditional distributors, retailers and LFRs (Large Format Retailers), but these online sales usually stabilize at 15-20% and do not grow beyond that, I think. Next online sellers are working on very less margins and this will also be a deciding factor in future how they can sustain on such low margins. According to me, traditional channel has its own confidence level and will remain there with a big share. Future will tell how things will shape up. People have higher confidence in traditional channel because they directly interact with the sellers, whereas online sellers and buyers interact remotely. Buyer is often doubtful about the online sites when he thinks about service.”
All other things being same, a better service provider has edge in the competition
In a tough competitive market while competing with MNCs and big players, with all other things being same, service quality will decide the winners and losers. Related to their service policy, Sanjay comments, “Service has been our strong point since beginning—we give the best and quick service to the end users. Top class service and unique features have always been our strong selling points that kept us ahead of our competitors. We have good control over our service network; we have our own TRCs, call centers, managers, technicians, etc. We have nearly 70 TRCs and about 700 ICTs. TRCs are our own, but ICTs are third-party. All in all, we have close to 800 service points pan-India.”
Along with good products, fitting accessories are essential to win the customers
Smartphone accessories segment is a fast growing market in India. According to Sanjay, “Mobile phone accessories are an attractive market today. For accessories, we launched a separate vertical that functions in coordination with other verticials. We are providing battery, charger and cover. Whenever we launch new models, we are now separately providing accessories. We have started manufacturing batteries for all our models in our factory in India. Now even chargers and flip-covers are also available. In the next 3 months, we are coming up with more powerful batteries, 3000 mAh and above, so that people can continuously operate their smartphones for a longer time.”
Due to their invaluable support, Intex has been able to build a high credibility amongst several million satisfied end users. Based on transparent, fair and ethical dealings, Intex has a simple channel strategy – how to increase sales in every market and at the same time ensure that all channel partners make money and work in harmony.
Regarding future plans, Sanjay concludes, “Now our penetration and reach have increased a lot. Out of 612 districts in the country, we are present in over 550 districts. After 2 years, we want to be among the top 3 brands in India. In the coming months, we want to sell 20 lac handsets including feature and smart phones (as I mentioned, at present, we sell 15 lacs per month). We want to increase the share of smartphone sales and not expecting a big increase in feature phone sales. We want to increase smartphone sales to 8-10 lacs per month. Earlier we were into tablets but later we kept that vertical on hold completely six months back, because there were lots of cheap brands available, margins were low and the market was messy. Since the markets have stabilized now, we again plan to come back into tablet market. Already we have 18 models for smartphones, as I said, and now we are launching 6 new models every quarter. In feature phone segment, we have 25 models starting from Rs 800 to Rs 2500. Initially we had one experience zone named Intex Square in North India, but we kept it on hold due to some reasons and now we want to open Intex Squares pan-India again by the end of this financial year.”